Navy's $300M contract back on track, could be awarded soon

January 24, 2013|By Richard Burnett, Orlando Sentinel

After a "fiscal cliff" delay that scuttled action for a week, the Navy's Orlando-based simulation-training agency is poised to award one of its richest programs in years — a series of deals together worth $300 million — to develop training systems for the Littoral Combat Ship.

The announcement, which could come as soon as today, would name the winners of a trio of contracts, each worth $100 million, that would support hundreds of jobs in Central Florida, officials say. It also comes at a time when the region's defense work force is ebbing as military spending faces major cuts mandated by the now-delayed deficit-reduction law.

Citing a recent Pentagon order requiring military agencies to consider major cost-cutting measures to prepare for sequestration – the so-called fiscal-cliff budget cuts — the Navy's Orlando agency said it delayed the Littoral contract awards last week until getting clearance from the Department of Defense.

"It was directly because of that order that we determined we needed a higher level of approval for these awards," said Brian Roscoe, spokesman for the Naval Air Warfare Center Training Systems Division, one of the Navy's largest training agencies. "Now it looks like the Defense Department has authorized it to go forward and all that remains it to notify Congress."

Industry experts said it is a coup for Central Florida's simulation training industry — the country's largest such industry — that the Pentagon green lighted the training contracts for the Littoral ship, an advanced, though controversial and costly lightweight warship designed to fight terrorists.

With the Pentagon loath to fund any new programs in the current budget crunch, it is significant that the Littoral training was OK'd by Defense Department brass, said Michael Blades, senior industry analyst with the consulting firm Frost & Sullivan.

"The industry will look at this as a blueprint for what any new programs will have to go through to get approved," he said. "The Littoral Combat Ship is such a large, expensive program, but such an important one for the Navy. It's a high priority, and they want to prove its worth.''

Earlier this month, the Pentagon issued a memo instructing agencies to adopt hiring freezes and consider other measures such as cutting temporary contractors, carrying out furloughs or issuing early-retirement offers to prepare for the deficit-reduction law's mandated budget cuts. They were supposed to take effect Jan. 1, but were delayed until March by a last-minute compromise between Congress and President Obama.

In a separate memo, the Navy warned its agencies to avoid awarding new contracts unless, among other things, they involve work that is deemed essential to ensure mission readiness of the armed forces.

"The training that would be provided would clearly impact readiness," he said. "We believe that simulation training systems are essential. They are always more cost effective than live training, and that's a good value for the government."